268 billion AED of capital invested in listed real estate companiesTruth Consultancy
A recent study by Truth Economic & Management Consultancy revealed that the GDP of the real estate and construction sector, one of the most important sectors of GDP, rose to about AED 346 billion for the fiscal year 2017 compared to about AED 326.8 billion for the fiscal year 2016, an increase of about AED 24.1 billion or 6% , While the contribution of the sector amounted to about 31% of the total non-oil GDP of the State for fiscal year 2017.
Reda Mosallam, general manager of Truth explained, that the results of the study revealed that the total capital invested in real estate and construction companies listed in the Abu Dhabi and Dubai Stock Exchange rose to AED 268 billion by the end of 2017 and witnessed a rise of AED 24.1 billion compared to FY2016, Where it was 244 billion dirhams, representing an increase of 10%.
The return on paid-up capital of the sector was 28%, while the average return on equity was 12%. The companies achieved a return on total invested capital of 6%, while the fixed assets turnover averaged about 55%.
He added, that the ratio of operating costs to total revenues from the current activity of real estate and construction companies amounted to 72%. The ratio of general, administrative and sales expenses to the revenues of the real estate and construction sector was 12%, while the ratio of corporate net profit margin was 29% .
He pointed out that real estate, construction and construction companies registered in the Abu Dhabi and Dubai Financial markets constitute 77% of the gross domestic product (GDP) of the real estate and construction services sector in the country.
The current assets of real estate and construction companies rose by 2017 compared to 2016 by 12%, from AED 147.1 billion in 2016 to AED 164.2 billion in 2017. Non-current assets (fixed assets) 2017 to AED 103.9 billion compared to AED 96.6 billion in 2016, an increase of AED 7.3 billion due to higher fixed real estate investments, property and investments in associates and financial investments during 2017.
According to Mosallam, current liabilities of all listed real estate and construction companies increased by AED 14.1 billion at the end of 2017 compared to FY2016 to AED 98.5 billion and increased by 14% to AED 112.6 billion due to higher trade payables during the year 2017.
The value of shareholders’ equity in real estate and construction companies amounted to 135.2 billion dirhams by the end of 2017, an increase of 10.2 billion dirhams compared to the end of 2016. This increase is due to the increase in reserves in various forms and the cumulative profits during 2017 compared to 2016.
Total real estate, construction and construction revenues recorded at the Abu Dhabi and Dubai Securities Market reached AED 58 billion at the end of 2017, an increase of AED 6.4 billion compared to AED 51.7 billion in 2016.
Real estate and construction companies witnessed a rise in their total direct costs by the end of December 2017 compared to 2016, reaching 33.6 billion dirhams, up by 12.3 billion dirhams to 45.8 billion dirhams by the end of 2016.
Real estate and construction companies registered in the Dubai and Abu Dhabi financial markets posted a net profit of AED 15.5 billion at the end of last year.